Corporate Law vs. Commercial Law: Understanding the Difference in Arkansas

When it comes to business law, the terms corporate law and commercial law are often used interchangeably, but they actually address different aspects of how businesses operate. Understanding the distinction is important for business owners, investors, and entrepreneurs in Arkansas who want to ensure compliance with applicable law, minimize risk, and make informed business decisions.

This article explains the key differences between corporate and commercial law, outlines a few important Arkansas-specific statutes that govern each area, and highlights when you may want to consult an experienced attorney.

What Is Corporate Law?

Corporate law governs the formation, structure, and management of business entities—such as corporations, limited liability companies (LLCs), and partnerships. In Arkansas, these laws dictate how businesses are created, who has decision-making authority, and how owners and managers fulfill their legal obligations in their interactions with each other and the business.

Key Rules in Arkansas

In Arkansas, corporate law is primarily governed by:

• Arkansas Business Corporation Act of 1987 (Ark. Code Ann. § 4-27-101 et seq.)
• Arkansas Uniform Limited Liability Company Act (Ark. Code Ann. § 4-38-101 et seq.)
• Arkansas Uniform Partnership Act (Ark. Code Ann. § 4-46-101 et seq.)
• Arkansas Uniform Limited Partnership Act (Ark. Code Ann. § 4-47-101 et seq.)
• Arkansas Securities Act (Ark. Code Ann. § 23-42-101 et seq.) for certain business financing and investment matters

Certain entities, such as nonprofit organizations and professional associations, may be subject to other laws in lieu of the above.

The Arkansas Secretary of State’s Business & Commercial Services Division (BCS) oversees business entity filings. Business entities generally must file their formation documents—such as Articles of Incorporation or Certificate of Organization—through this office. Forms can often be filed online, sometimes for a reduced fee, though paper forms remain available for filing. Additionally, business entities formed outside of Arkansas that operate within the state must register to do business with the Arkansas Secretary of State.

Most Arkansas businesses are also required to file an annual franchise tax report by May 1 of each year. Failure to file or pay this tax can result in penalties or administrative dissolution.

What Is Commercial Law?

While corporate law focuses on a business’s internal structure, commercial law governs how businesses interact with others in the marketplace. It deals with the sale of goods, financing, credit, and trade practices that occur during everyday operations.

Key Areas of Commercial Law

Commercial law regulates activities such as:

• Buying and selling goods and services,
• Secured transactions and credit arrangements,
• Negotiable instruments (like checks and promissory notes),
• Leases and financing agreements, and
• Advertising, consumer protection, and fair trade practices.

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Arkansas Laws That Apply

Arkansas has adopted most of the Uniform Commercial Code (UCC), which aims to provide a standardized framework for business transactions across the United States. Commonly used UCC provisions in Arkansas include:

• Article 2 – Sales (Ark. Code Ann. § 4-2-101 et seq.)
• Article 9 – Secured Transactions (Ark. Code Ann. § 4-9-101 et seq.)

When filing security interests under Article 9 of the UCC (for example, to protect a lender’s rights in collateral), filings are typically made with the Arkansas Secretary of State using a UCC Financing Statement (Form UCC1).

The Arkansas Deceptive Trade Practices Act (ADTPA) (Ark. Code Ann. § 4-88-101 et seq.) also plays an important role in commercial law by prohibiting deceptive, misleading, or unconscionable business practices.

These are only a few of the key Arkansas statutes relevant to commercial law, which encompasses a broad range of statutory and common law principles.

Corporate Law vs. Commercial Law: Key Differences

How the Two Areas Overlap

In practice, most Arkansas businesses operate at the intersection of both corporate and commercial law. For example:

• A company’s board of directors (corporate law) may authorize a secured loan governed by Article 9 of the UCC (commercial law).
• When a corporation sells assets or inventory, the sale is governed by Article 2 (Sales), but the approval process must follow corporate governance requirements.
• A newly formed Arkansas LLC may need to review ADTPA to ensure its advertising practices are compliant and don’t mislead consumers.

Understanding where these two bodies of law intersect helps business owners anticipate risks and ensure their contracts, filings, and governance documents work together seamlessly.

When to Seek Legal Guidance

Because corporate and commercial law are deeply intertwined, business owners often benefit from working with an attorney who understands both.

You may want to consult an Arkansas business attorney if you are:

• Forming or restructuring a company.
• Negotiating contracts or credit agreements.
• Securing or providing financing.
• Considering a merger or acquisition.
• Selling company assets outside the ordinary course of business.
• Facing a dispute over warranties, payment terms, or deceptive trade practices.

At RMP Law, our attorneys assist Arkansas businesses with every stage of their lifecycle—from formation and governance issues to major transactions and compliance matters. We provide practical, strategic guidance to help companies operate confidently in Arkansas.

Call RMP Law Today

Whether you’re starting a business or managing complex commercial transactions, understanding how corporate and commercial law work together is key to protecting your interests.
Contact RMP Law today to schedule a consultation and learn how our attorneys can help your business. Call (479) 443-2705 or Message Us to schedule a consultation.

DISCLAIMER: The information provided on this website does not constitute legal advice. Instead, all information, content, and materials available on this site are for general informational purposes. Information on this website may not constitute the most up-to-date legal or other information. Readers of this website should contact their attorney to obtain advice with respect to any particular legal matter.